After sugar, coffee is the second most export agricultural product in El Salvador. For more than 200 years, it was a bastion of the economy.
The price of Arabica coffee reached its highest level in almost fifty years on Wednesday due to concern for crops in Brazil, affected this year by major droughts.
The quintessential Arabica listed in New York reached 325.45 dollars on Wednesday, a price at which it has not reached since 1977.
According to Jack Scoville, analyst at Price Futures Group, the rise is explained by fears of “bad harvests due to adverse weather conditions” earlier this year, especially in Brazil, the world’s largest producer of coffee, and Arabica in particular.
Brazil faces the driest weather since 1981, according to the natural disaster monitoring center Cemaden. In addition, Colombia, the world’s second-largest Arabic producer, is recovering from drought conditions earlier this year. The adverse weather also affects Vietnam, another of the world’s largest coffee producers.
The price has also been hit by geopolitical factors, including disruptions to shipping in the Red Sea, possible US tariffs following the election of Donald Trump and the future European Union regulation on deforestation.
“In this context of uncertainty, farmers are choosing to sell just what is necessary, which limits the supply of coffee,” says Guilherme Morya of Rabobank.
For its part, the robust coffee listed in London is around $5,200 a ton.
In mid-September it reached a record price of $5,829, an unprecedented level since 2008.
This article was translated after originally appearing in Diario El Mundo